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As a company with over 20,000 suppliers around the world, Stora Enso can help global supply chains become more sustainable. Stora Enso has strict requirements for all its suppliers and supports them in becoming more sustainable.
Stora Enso’s key performance indicator (KPI) for responsible sourcing measures the proportion of total supplier spend covered by its Supplier Code of Conduct (SCoC), including all categories and regions.1 By the end of 2021, 96% of Stora Enso’s total spend on materials, goods and services was covered (96% at the end of 2020), which exceeds the company’s target to maintain at least the level of 95%.
Stora Enso launched its updated SCoC in 2021, and held many internal training sessions in addition to numerous supplier dialogues on the updated SCoC. The new SCoC updates Stora Enso’s requirements for suppliers on topics, such as data privacy, climate change, biodiversity, ethical recruitment and reasonable remuneration for employees. Together with the SCoC, Stora Enso launched practical guidance for suppliers, which is meant to support suppliers in implementation and interpretation of the SCoC requirements.
During 2021, a total of 70 Stora Enso suppliers were audited through third-party sustainability audits (22 in 2020). The third-party supplier audits were largely online audits due to the global pandemic. The audits continued to focus on suppliers with heightened sustainability risks, as identified by the company’s country and category risk assessment. By the end of 2021, 54% of identified high-risk suppliers, by spend, were covered by third-party sustainability audits (51% in 2020). One supplier contract was terminated due to occupational safety issues in 2021 (none in 2020). In addition, one supplier contract was not renewed due to misconduct related to business ethics. For more information, see our Annual Report 2021.
In 2021, 47% of Stora Enso's total variable costs consisted of purchases of materials, goods, and services, while fiber procurement accounted for 53%. Materials and products sourced by Stora Enso include wood and fiber-based materials such as pulp and paper for recycling (PfR), chemicals, fillers, energy, fuels, and spare parts, as well as maintenance, logistics, and IT services.
To ensure the responsible sourcing of these materials, all suppliers wishing to do business with Stora Enso must first pre-qualify during tendering or, at the latest, before a contract is drafted. To pre-qualify, suppliers must complete a questionnaire, submit confirmation of their compliance with Stora Enso’s Supplier Code of Conduct (SCoC), and complete its safety management online training. We also offer training to our purchasers.
Based on a pre-evaluation of a supplier’s social and environmental risk profile, they may be selected for a third-party sustainability audit, conducted together with our purchaser. Any suspected SCoC non-conformances brought to our attention are investigated and followed up. Similarly, any non-conformances identified during audits are followed up with supplier meetings where the findings are discussed and corrective action plans devised. Relationships are terminated when suppliers are not willing to improve their performance.
In addition to enforcing our SCoC, we actively help our suppliers improve their sustainability performance. Our topic-based “deep dives” or thorough reviews of specific supply chains, for example, help us better understand the operations, opportunities, and challenges of a supply chain related to a specific topic or category.
In October 2021, Stora Enso launched its new sustainability targets. Prior to this, we wanted to hear our suppliers' views and current activities on the key focus areas of climate change, biodiversity and the circular economy. Stora Enso's new targets include ambitious science-based-targets for scope 3 emissions (-50% by 2030). A road map was developed with key activities to support the company’s carbon work during the next five years. It was identified that some suppliers were very advanced in their climate work, and others were just getting started. Stora Enso wants to provide an opportunity to raise the level of knowledge on climate change. To do this, the company launched a climate change and emissions-related e-learning training package for suppliers at the end of 2021. The training shares basic knowledge on climate change, walks the suppliers through how to calculate GHG emissions, and urges them to reduce their emissions by setting ambitious emission targets.
The Stora Enso Supplier Code of Conduct (SCoC) is a binding legal document that imposes minimum sustainability requirements on suppliers. Other supporting policies include:
Through our Supplier Code of Conduct, we also implement policies and guidelines such as our Policy on Wood and Fiber Sourcing, and Land Management, Chemical Management Guideline, and Human Rights Policy.
Stora Enso can use its purchasing power to drive its suppliers to make their operations more sustainable. We consistently respond to the demands of our stakeholders concerning transparency and the sustainability performance of our suppliers. Similarly, we are looking for ways to address the growing stakeholder demand for less plastic when sourcing materials. By passing on sustainability requirements to our direct suppliers, we are able to drive positive change further down our supply chains.